At the heart of any franchise lies a franchise agreement: a document that outlines the legal terms between a franchisor (the business) and the franchisee (you). Unlike other countries, the UK does not have specific franchising laws, meaning your relationship with a franchisor will be guided entirely by a franchise agreement – a well-drafted one will give you a clear understanding of your rights and responsibilities as a franchisee, such as intellectual property rights, ongoing fees, support and operational management.

By signing a franchise agreement, you and the franchisor are bound to comply with the terms set, and failing to do so may result suspension or termination of your franchise.

This might sound quite daunting, but a franchise agreement exists to benefit you and your relationship with the franchisor. Here’s how.

How It Benefits Both Parties

Protection Of Intellectual Property

Taking on a franchise means you will be given the right to operate under already-established intellectual property (also known as a brand). Because the franchisor will want to protect their intellectual property from being misused, a franchise agreement sets the guardrails for appropriate use of company assets. This could include marketing, advertising, staff uniforms and logos.

Fee Clarity

You will of course have to pay ongoing fees to the franchisor in exchange for intellectual property access and support. The franchise agreement will layout exactly what fees need to be paid and when – giving you peace of mind and greater control over your finances.

Organisational Development

As a franchisee, you have the right to ongoing organisational development from the franchisor. A franchisee agreement outlines these rights, and could include training, maintaining standards, advice and support and business development.

Risk Limitations

Like with any business relationship, you may face obstacles that put a strain between you and the franchisor. A franchise agreement will include solutions for resolving disputes, terminating/renewing agreements and any non-compliance such as refusing to pay fees or, in the franchisor’s case, revoking your access to the brand. You will, in-short, be equipped to deal with any issues that arise throughout your time as a franchisee.

What Should I Consider Before Signing A Franchise Agreement?

Before you sign a franchise agreement it’s really important to consider if the benefits you receive outweigh the costs. Ask yourself if the initial fee and ongoing fees seem reasonable: can you justify the cost in exchange for the brand, the support and its products? Are you passionate about, or interested in, the brand and the industry? Will you feel motivated operating under it?

And, of course, don’t be afraid to ask questions. You need to understand what you are investing in, so all questions are relevant.

Starting your journey as a franchisee is only a click away. Book in a call with master franchisor Mark Holland to learn more.